Gross margin for the overall business was 53% in the third quarter improving from 52% in the prior year with all segments posting improved or steady gross margins. Gross profit increased 4% to $359 million. The outdoor segment made the largest contribution to the gross profit improvement, posting a 69% gross margin and over $72 million in gross profit. We also had strong gross margin expansion in fitness, aviation and marine where product mix has shifted toward high margin business in the current quarter.

Operating margin for the overall business improved to 24% when compared with 22% in the year-ago quarter with gross margin improvement and stable operating expenses. Total operating expenses increased only $2 million year-over-year and by 10 basis points as a percent of sales. Research and development expense increased by $10 million, as we continue to invest for future growth as previously mentioned. This was partially offset by advertising expense, which decreased by $5 million, and other selling, general and administrative costs, which decreased by $2 million as we have now fully integrated our prior year acquisitions. We are pleased to see our operating expenses stabilizing without a reduction in our commitment to research and development.

Free cash flow generation continued to be strong with $155 million generated in the quarter. We had a cash and marketable securities balance of over $2.7 billion at the end of the quarter. We intend to continue to fund our quarterly dividend and future acquisitions with our strong cash position.”

Non-GAAP Measures

Pro forma net income (earnings) per share

Management believes that net income per share before the impact of foreign currency translation gain or loss is an important measure. The majority of the Company’s consolidated foreign currency gain or loss results from transactions involving the Euro, the British Pound Sterling and the Taiwan Dollar and from the exchange rate impact of the significant cash and marketable securities, receivables and payables held in U.S. dollars at the end of each reporting period by the Company’s various non U.S. subsidiaries. Such gain or loss is required under GAAP because the functional currency of the subsidiaries differs from the currency in which various assets and liabilities are held. However, there is minimal cash impact from such foreign currency gain or loss. Accordingly, earnings per share before the impact of foreign currency translation gain or loss allow an assessment of the Company’s operating performance before the non-cash impact of the position of the U.S. Dollar versus other currencies, which permits a consistent comparison of results between periods.

The following table contains a reconciliation of GAAP net income per share to pro forma net income per share.